The Indianapolis journal., 1887-05-18
AND UNION PACIFIC
The Magnate Was Opposed to the Con-
solidation and Sought to PreventIt,
Scheme-He Grows Indignant Over In
situations of Dishonesty in the Matter.

investigation before the Pacific railway commits
sion, this morning. found the well-known
broker, John Pondir. the stand. Pondir
went over the old story of the Credit Mobilier,
in which the names of Jim Fisk, Jay Gould,
Oakes and Oliver Ames, John B. Alley and
others figured prominently, and which has been
made familiar to the public by the investigation
of the old Wison-Poland committee. Pondir
took occasion to vindicate Oakes Ames, saying
that he was an honorable man and was killed by
the infamous stories told concerning him. When
asked if John B. Alley was dead, the witness
said he was good dead; that he was poor.
Pondir attempted to show the connection of Mr..
Blaine with the credit Mobilier. He said that
when Tom Scott was elected president of the
Union Pacific Scott told the witness that he had
eehty-two bonds which belonged to Mr. Blaine,
which the Union Pacific would have to pay.
The stock was shown to witness. 1t not
stock of that company, but he did not know what
stock it was. Mr. Pondir was dismissed with
request to furnish his books for the of the
commission, and left the chair to find the king
of fnancers. Jay Gould, whom he had been
abusing soundlv, sitting directly behind him.
He greeted him with familiarity, and said he
had left little for Mr. Gould to explain to the
commission. Mr.. Gould accepted this pat on the
back smilingly, but said nothing. being absorbed
in the contemplation OF a lot of figures he held
in his hand.
Jay Gould was the next witness. He has re-
sided in New York since 1858. During the past
twenty-five years he has been connected with
railroads. His first connection with the Union
Pacific was in 1873. In the spring of that year
he met Horace F. Clark in Chicago. He spoke
so highly of the property that he sent order
to New York to buy at 38 and scale down. 'Mr
Clark was sick and about to die, and his stock
was sold, my orders catching It. The stock be-
gan to go down. and was anxious" continued
the witness II asked Mr. Alley what the
D.
He said that il had an immense floating indebr-
edness and $40, ,000. 900 in funds due. I found
that Sidney Dillon and Oliver Ames could be re-
lied among the directors, and we went to work
to fund this floating debt. l had 100. 900 shares
of the stock at that time. | became a member
of the board in 1874 and member of the
executive committee Sidney Dillon. Oliver
Ames and Gordon Dexter continued hold Of
fee as directors. AS we improved the property
the stock went up. went over the road twice
year while director I had no interest in the
suit of James Fisk. jr., against the Union Pa
cifc l think David Dudley Field of
Mr.. Fisks lawyers He has acted for me- |
deny, emphatically, that had any connection
with the Union Pacific before 1873. never took
any interest in the Kansas Pacific until 1878. and
recall nothing of tho proposed consolidation with
the Union Pacific as early as 1875. There might
have been something in the press about it, but
[ am not responsible for what floats about in the
papers: remember nothing of cons ultation with
Col. Thomas Scott at the Continental Hotel, In
PHILADELPHIA, concerning proposed coEsolda-
tion of the roads in 1875, nor do l remember of
any action looking to unity of interests be-
tween the Kansas Pacific and Colorado Central
at that time. The Colorado Central was pure
ly mineral road at that time 1t had connec-
tion with the Union Pacific to Cheyenne"
Mr.. Gould produced Union Pacific time
table, with map, to explain the connection of the
roads.
Don't you know. Mr.. Gould, that there was
an agreement in 1879 for union of the Kansas
Pacific and Colorado Central. whereby the stock
of the Kansas Pacific was to be increased $780,
900, OOOE was asked
Now that you recall it, there was; but it was
never consummated. We were irving TO force
pro rata with the Kansas Pacific, and this was
one of the attempts. / think I-muse-eave seeR--
Colonel Scott in this connection for the St. Louis
people had great deal of confidence in him.
The branch connecting with the Union Pacific
and Colorado Central was built before 1878. but
don't remember exactly when. The effect of
building this line was lessen the earnings of
the Denver Pacific. l have an indistinct recol-
lection of agreement, in 1879, whereby the
Colorado traffic was surrendered to the Kansas
Pacific, the Union Pacific taking all west of
Cheyenne. | increased my interest in Union
Pacific from 1873 to 1878 I owned about 200, 900
shares in 1878. The entire issue 1890
shares
.T keep books of nv tr ransactions My book
keeper, / think, was Mr. Morosini. He began
before 1878. Before that l relied on brokers'
My books at the service of the commission,
with the greatest of pleasure"
The pool agreement of 1878 was shown the
witness He said: II recall that there
such pool though l must say that had for
ties. don't know what paid for the ST. 143 700
stamped income bonds They entered at 80
more than I paid for them. My
books will show / purchased these securities
from the st. Louis people. My books will show
whom | bought them of. 1 presume conferred
with the persons whose names are signed with
reference to the pooling agreement. | presume
that l would have the neuralgia worse than
have it now if I should tell you of all the ques
tions that led to this pooling agreement. The
only way saw out of the difficulty was to take
the of securities IN mans hands and issue
consolidated mortgage bonds as preliminary
to placing the property on its feet.
Before that all was confusion. 1t being impossi
BILE to tell what the securities represented. l
don't know what lawyer drew the agreement,
that ever read it before knew what the gen.
eral idea of it was. and signed it. / agreed to
accept 80 for my pool securities I led off
in fixing the price at that sum, though great
many thought it too low. [ presumed at that
paid for them. The unstamped bonds had bet
ter lien than the stamped, and the value of
them was fixed at 80. This agreement was got
up to be about fair basis as with our
Knowledge. we could make. There were $17,-
O0O000 to be funded into So, 855, 300. 1t was
soon demonstrated that this pool agreement
would not carry. and the consolidated mort
gage was determined on between April 1878,
and May. 1879. / don't remember whether it
was before the ST. Louis people were bought
out think that Judge Usher drew the mort
gage / had no correspondence with him.
Our arrangements were all by word of mouth.
The object of the consolidated mortgage was
to consolidate the Heterogeneous mass of
securities into one uniform security. [ must
have taken a prominent part in the establish
ment of the rates for refunding. No provision
was made for the payment of interest on the
funding bonds 20 about $780, 900 on fixed
charges, and make the consolidated mortgage as
small possible, cut off ourselves Most
of these bonds were held Dy Mr.. Ames and my
self. These securities had been issued to the St.
Louis people. I don't know whether I had
bought them or lent money them at that
time. l thought that 80 cents was fair price
NY nT CT Nad ynnn hnr dc
thought it would be for others. That is the
price / took for all mine in the pool. / don't re-
member who managed the pool, and kept the
figures, whether / actually delivered these secur-
tiles to the executive committee not. NY
books will show accounts of my transactions in
this regard don't attempt to charge my mem
ory with them. / don't know whether received
certificates from Mr. Ham of my interest in my
bonds. but think there a preliminary certifi-
cate issued; if SO. they have been deliv-
cred and cancelled. After we had